Emergence of Extranets as the Key Technology Enabler

---

An extranet is defined as an extended or expanded corporate intranet, using Internet technology, operating over the Internet for a wide range of applications by building bridges between the public Internet and private intranets. The Internet-based wide area network (WAN) links an organization and its trading partners in a secure, electronic online environment (Baker, 1997; Bayles, 1998; Bort & Felix, 1997). An extranet is created if more than two companies open parts of their intranets to each other and thereby create an inter-intra-net in order to improve coordination with trading partners in virtually all functional areas. The trading partners include a client that represents a substantial portion of the company’s revenue, companies working on a joint development project, distributors, contractors, suppliers of raw materials, vendors, dealers, consultants, etc. A secured extranet allows trading partners to gain limited (controlled) access to a collaborative network to increase profitability and competitive advantages through managing important organizational activities in the most timely and cost- effective manner (Riggins & Rhee, 1998).

The extranets can be classified as either intronets or supranets (see Table 1 of Chapter 1 in this book). Three automakers (DaimlerChrysler, General Motors, and Ford) are cooperating on an industry-wide extranet called the Automotive Network Exchange (ANX). The industrial extranet will continue to grow. The ANX network is expected to connect the 1000 Tier 1 suppliers, 9000 Tier 2 and 3 suppliers, and 40,000 others who communicate with automakers in the near future (Liebrecht, 1999). The health-care industry has joined and started to use the ANX. Because the auto industry spends billions of dollars every year to provide health insurance for its employees, it seemed like a logical step for the auto industry to bring insurance companies and hospitals onto the ANX network (Bushaus, 2000).

Table 1: Applications of extranets

Data/Information/Knowledge	Communication	Decision Making
Gather transaction data from trading partners and share it with them; the data includes purchase orders/payment instructions, product catalogs, and product shipments	Private newsgroups among the members of cooperating organizations sharing ideas	Collaborative decision making using groupware via brainstorming, voting, outlining, and writing virtual teams through synchronous as well as asynchronous communication (e.g., new product developments)
Training/education program materials	Advanced videoconferencing systems	Joint project management and control through application sharing
Knowledge management by creating an inter-organizational repository of data, information, and knowledge (CAD/CAM/CAE files, design specifications, etc.)	Text-based chatting and white board	Collaborative/interactive computer-aided design/computer-aided manufacturing/ computeraided engineering using multiple workstations
	E-mails and electronic bulletin board systems	Operational planning based on trading partners' monthly forecasts for sales
	Real-time voice communication	High-speed prototyping with fastest communication links
	Workflow management	Supply chain management

---